As Texaco lost the first, third, and fourth factors, the appeals court upheld the lower court decision and found that Texaco had infringed. But you should not conclude from the Texaco decision that a corporate library or any library in a for-profit organization can never copy journal articles for researchers; the court did not say that all copying in for-profit companies is infringing. Indeed, the court limited its ruling “to the institutional, systematic, archival multiplication of copies revealed by the record—the precise copying that the parties stipulated should be the basis for the District Court’s decision now on appeal and for which licenses are in fact available.”[1]
Remember that fair use is an equitable concept; whether a use is or is not fair depends on the particular facts of each case. A company that fails to purchase as many subscriptions or licenses as it needs and uses large-scale copying or distribution—either by the library or by employees—as a substitute for subscriptions risks liability as an infringer. This is true not only in for-profit corporations such as Texaco, but even for non-profit educational institutions. The lesson from Texaco is not that fair use doesn’t exist in the corporate sector, but instead that there are limits as to what libraries and employees of an organization may do.
Let’s take a closer look at fair use in the for-profit sector. We need to recognize first that there are different types of for-profit entities, and that they are not all created equal under copyright law. Two of the earliest infringement lawsuits against corporations for internal copying were orchestrated by the Association of American Publishers in the early 1980s. Both resulted in out-of-court settlements. American Cyanamid, the defendant in the first suit, relinquished all fair use rights and agreed to make payments to the Copyright Clearance Center for internal copying. The other corporation, Squibb, also joined the CCC, but under its settlement did not have to pay royalties for a small amount (6%) of their copying that was considered fair use.[2]
